TCC Case On Adjudicator's Jurisdiction To Consider Cross-claim, And Relevance Of Party's Intentions When Issuing Payment Notices

• Published date: 29 September 2021
• Law Firm: Shepherd and Wedderburn LLP
• Author: Ms Leigh Herd

The Technology and Construction Court in Downs Road Development LLP v Laxmanbhai Construction (UK) Ltd [2021] EWHC 2441 (TCC) held that an Adjudicator's decision not to consider a line of defence was a breach of natural justice and was not enforceable, nor could part of the decision be severed. The case also contained interesting commentary as to the 'intent' behind the issuing of a payment notice, and how this may affect the validity of the notice.

Background

Downs Road Development LLP (the Employer) employed Laxmanbhai Construction (UK) Ltd (the Contractor) in connection with the demolition of buildings and development of land under an amended form of the standard JCT Design and Build Contract (the Contract). Under the Contract, a periodic payment scheme applied requiring the Contractor to make interim applications for payment. A dispute arose concerning the correct sum due under interim application 34. In response to the Contractor's application 34, the Employer issued a Payment Notice 34 on 3 March 2021, assessing a net payment due of '0.97. This was followed six days later by Payment Notice 34a, which assessed a net payment of '657,218.50.

Adjudication

The Contractor referred the matter to adjudication for a determination of the correct sum due. The Employer...